A review by microfinance blog

May 21, 2008

Microfinance blog reviewed the book:

After hearing Professor Yunus speak last week in San Francisco, I was eager to read his latest book, Creating a World Without Poverty. Today I finally had the opportunity to read it, and here are some of the best ideas (minus ones I mentioned earlier in the speech review):

* Win/win globalization needs controls to protect the small players. Government regulation alone cannot do this completely, politics often stands in the way of efficiency. Instead, we need change within the private sector.

* Grameen uses a variety of indecis to measure success, while many multi-lateral developmental organizations simply measure amount of money distributed. Social businesses must link success with results.

* Conventional businesses, even socially responsible ones, are not the total answer. Their first priority is producing profits for shareholders.

* Social business takes systems from profit-producing ones, but its main objective is delivering social benefits.

* Social business from an investor’s perspective
– Loaned (startup) money is paid back, but without dividends (interest, profit)
– Investors are philanthropists with a win/win outcome: their money back, plus ownership of the company
– Business profits stay in the business, rather than being paid out to shareholders
– The business spends time providing products and services to cover overhead costs, rather than fundraising
– For this reason it is self-sustaining, self-expanding, and self-perpetuating
– Social startups compete for investment based on efficiency and results

* There are two types of social business:
1. Ones providing social benefits
2. For-profit corporations owned by the poor

* Grameen uses a 10-point quality-of-life system for analyzing poverty, rather than the typical “X million people live on less than $X per day”.

* Microcredit promotes initiative and responsibility among the working poor, while charity defeats this.

Yunus provides a realistic, workable plan for sustainable poverty reduction through social business in this book. It is a must read for anyone interested in economic and social development.

microfinannce blog

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